WASHINGTON, D.C. — Canadian-made hockey sticks, liquor and cement share one unfortunate fate: they are among more than 500 products targeted by the White House with 50 per cent duties under Section 338 of the Tariff Act of 1930. The duties are set to go into effect — unless President Donald Trump changes his mind — on August 19.
Last week, U.S. Trade Representative Jamieson Greer announced that the Trump administration plans to impose these duties in response to “Canada’s discriminatory treatment of U.S. commerce,” ranging from automotive retaliatory tariffs to provincial bans on U.S. liquor sales. The threatened tariffs also apply to products that normally qualify for preferential treatment under the Canada-United States-Mexico Agreement (CUSMA).
“The U.S. does not feel constrained by the letter of the law contained in USMCA,” said Clark Packard, research fellow for Cato’s Herbert A. Stiefel Center for Trade Policy Studies.
“The U.S.’s word is … no longer good,” he added.
Trade watchers and industry leaders say the tariffs are all about U.S. leverage for CUSMA negotiations — with the U.S. seeking a lifting of U.S. alcohol sales bans and an end to the Canadian dairy supply management system, among other things — but they hesitate to predict whether Trump will follow through.
“Is it just more TACO, Trump Always Chickens Out? Or is it just a threat to get the Canadians to do what he wants them to — to accept unfavourable terms? I don’t know,” said Andrew Hale, fellow at Washington-based Advancing American Freedom. “It could be that, or he could be serious.”
Packard also expressed caution.
“My overall perception is that a lot of this stuff is just posturing, and the U.S. will ultimately back down,” he said, but noted that they may still go ahead.
Still, many experts say the 338 tariffs are illegal.
“They’ll be challenged in the courts and defeated,” said Hale, who believes the U.S. administration is simply rebuilding its IEEPA tariff wall through other means.
Packard agreed and said 338 has effectively been superseded by Section 301.
“A legal challenge is going to happen,” he said. “I think it’s more likely to succeed than Section 301 litigation.”
Both he and Hale point to the role the statute assigns to the International Trade Commission (ITC) to continuously monitor global trade for unfair practices and advise the White House accordingly. The fact that the ITC did not make any recommendations in this case, they say, makes it legally vulnerable.
But customs lawyer Carrie Owens, partner at international law firm Kelley Drye in Washington, is more cautious.
“It does not state the president can only act after an ITC report or recommendation.” Instead, the ITC role here is “more in an advisory capacity,” she added.
Whatever happens in legal terms, the tariffs will have a very negative impact on the five per cent of Canadian exports affected.
“It is massively disruptive to the industries targeted,” said Hale.
Packard said the selection of the products appeared “haphazard,” but he and Hale noted that the hockey sticks were being targeted because they’re quintessentially Canadian.
“Hockey sticks … is kind of a dig at some national pride,” said Packard, noting that “hockey stick exports matter a hell of a lot more to Canada than hockey stick imports do to the United States.”
Joey Walsh, founder and CEO of Hockey Stick Man, a hockey equipment retailer, sees the tariffs against hockey sticks as a tool for provoking Canadians.
”When threatening hockey sticks, you’re doing it calculated for political purposes to enrage Canadians … but the administration must know that consumer recreational products are not something that’s really manufactured in either country.”
Roustan Hockey Ltd is the only manufacturer of Canadian hockey sticks, and owner W. Graeme Roustan said the company makes roughly 500,000 sticks per year, with about 30 per cent sent to the United States.
Trying to ship months’ worth of exports to the U.S. before August 19, like Canadian exporters did last year ahead of “Liberation Day,” is impossible because his company works with long lead times.
“We don’t have inventory. We don’t build sticks and put them on a shelf,” he said. “It’s all by the order. These are custom orders … and it’s a three-month process.”
The Canadian cement industry, meanwhile, has been notably quiet since Greer’s announcement. Dan Valin from the Cement Association of Canada said his organization’s members were assessing the situation but did not have a public comment at this time.
But since the value of the cement the United States imported from Canada in 2023 was just over $442 million, the tariffs are likely to impact a lot of sales — and potentially, U.S. housing costs.
“Targeting a major cement supplier… I do think that… could end up raising costs for U.S. builders,” said Packard, who noted that the U.S. could easily take unilateral steps to lower housing prices, starting with the elimination of softwood lumber duties and steel tariffs.
“Americans are paying extra for (these inputs) because of some stupid tariff. And now you’re adding cement. The Trump administration talks a lot about affordability, but it’s taking steps that are totally contrary to that.”
Of the three sectors, the most vulnerable may be Canadian alcohol.
Cal Bricker, president and CEO of Spirits Canada, the trade association of the distilled spirits industry, said the 338s pose a serious threat because Canadian spirits exports are highly exposed to the U.S. market, with about half of their production going south of the border.
“We produce about $2 billion worth of spirits in Canada, and a billion of it is sold in the U.S.,” he said.
He sees the tariff move as connected to broader retaliation and trade grievances — namely the provincial alcohol bans.
Canadian liquor companies, he said, are focusing on reviewing their supply chains while remaining “hopeful for some kind of a deal” before the August 19 deadline.
When pressed about the legality of the 338s and possible lawsuits, he said he feared the legal challenges may not stop the damage quickly enough.
“They may get challenged legally, and they may lose, but you lose a lot of time,” he said.
Packard also mentioned that tariffs may lead to new supply chain decisions that could be hard to reverse later.
With 85 per cent of the value of alcohol exports coming out of Ontario, Bricker noted that the impact would extend beyond distillers and to the whole supply chain, including grain growers and other upstream suppliers.
“We’re a pawn in a larger game,” he said.
“How much more of this kind of thing can we withstand?”
National Post
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